Opinion Piece: Racehorse Syndication
Over the last decade, the emergence of race horse syndication has been prominent within the industry. It sets Australian racing apart from most of its peers in other jurisdictions around the world and is certainly a key difference between the thoroughbred and standardbred industry in Australia.
However, the question is sometimes asked; Are all these syndicators good for racing? Our answer is an overwhelming YES! There are many positive impacts that racehorse syndication has bought to the industry and in this opinion piece we will highlight our top three: 1. Reduce Cost of Entry to Ownership Racing isn't known as the 'Sport of Kings' by chance. There is no question that owning a racehorse can be a costly exercise, with little or no return in some cases. For a metropolitan trainer to run a profitable business they now need to charge $100/day or more. And with the yearling sale market continuing to go from strength to strength even just buying a horse is expensive. Syndicators make entry into ownership for the new and/or uneducated participant so much more affordable and easy. They deliver greater understanding by providing information that is sometimes harder to obtain if you don't know the right people. 2. Owner Experience and Communication With advances in technology, syndicators are now well placed to provide their owners with a terrific communication platform. In fact, the communication experience provided by syndicators is often the industry benchmark. Owners receive frequent updates on their horses progress either via a group audio message, email and often video. They frequency of updates is now so much better than in the past and syndicators can take much of the credit for the improvement in communication. Further to this many companies now add to this with a variety of exclusive events for their owners. Yearling parades, open days, tours and more are now fantastic events which many companies offer to their owners.
Leading bloodstock agent James Harron is a terrific example of this with his JHB Syndications business. Harron has opened up access to the inner workings of some of his trainers operations providing his owners with rare access.
Through other events such as open days all companies deliver a great service to their owners with access that is otherwise harder to gain. This level of communication and access adds to the wonderful experience of owning a race horse. 3. Keeping Racing Relevant in the Mainstream It is not uncommon now for horses to have 20 owners, with in many cases each owner being able to secure a 5% share for a very affordable sum.
If you consider that hundreds of horses are now being syndicated every year this brings so many new people into the industry and means that there a significantly more 'water cooler' conversation happening in the workplace about someones horse racing on the weekend. As industry we now compete so heavily against every other mainstream sport or entertainment event to attract participation and attendance. Race horse syndication is such a valuable medium to broaden the reach of racing in the mainstream.
When you consider the success of so many syndicated horses in the nations elite races we now have so many more mainstream consumers experiencing what is perceived to be only for the 'elite'. Redzel, Sebring, She Will Reign, Theseo, Dothraki and the list goes on... all syndicated horses that have opened the gateway for the average to experience the elite. Buyer Beware Like anything, there are risks associated with buying a horse and things you should know when buying through a syndicator. To be clear, these are not negatives, just important information to be aware of upfront;
Additional Costs & Management Fees: Syndicating a horse costs money and like any business syndicators need to recover their costs to run a profitable business. So, know that when buying a share in a horse there are additional costs incurred to cover the management of the syndicate which will be passed on to you the owner. The best way to understand these costs is to read the product disclosure statement before choosing your horse.
Direct Access to your Trainer: This can be hard with syndicates. If your trainer has 5 syndicated horses is her/his stable with 20 owners each, talking to 100 people every week is simply not possible. Therefore, know that most of your communication will be via the syndication company or sent in the form of a group message. In our experience most companies do a terrific job of providing regular and accurate information to owners. They also do their best to provide exclusive experiences to their ownership groups through open days and other select events.
Influence and Decision Making: When you buy a share in a horse via a syndicate you must accept that your influence over decisions is limited and for good reason. When syndicators form relationships with trainers they do so because they trust the trainer and what they do. In most cases decisions about where and when the horse races, jockeys etc. will be left to the trainer. We recommend when buying into a horse you do so with a trainer whose reputation you trust, so you can focus on enjoying the experience.
Being involved in a racehorse is a great experience we recommend to anyone and everyone. Doing it partnership with some like minded friends as part of a syndicate can be a great social way to enjoy a day the races with friends.